Legal Risks Involving Marital Property Agreement in Ningbo

A marital property agreement is an agreement between husband and wife on the ownership of common property. With the enhancement of social legal awareness, more and more couples choose to sign marital property agreements to clarify the common property of husband and wife and protect the rights and interests of both parties, whether it is to avoid property disputes, or to make appropriate property based on the existence of marital fault on one party and the protection of the rights and interests of the other party. Considering compensation, it has become a more common choice for couples to sign marital property agreements. However, a valid marital property agreement has many legal risks to be aware of when drafting and signing.

1. marital property agreements cannot break through the relativity of contracts

the relativity of a contract means that a contract is legally binding only between its various signatories, and marital property agreements are no exception. For example, the agreement on debt in the marital property agreement is only an internal agreement between the spouses and does not have external effects against creditors. During the existence of the marriage relationship, the debt incurred by one party in the name of the individual for the family's common life or production and operation is the joint debt of the husband and wife. The creditor has the right to claim repayment of the debt from either party.

2. agreements are subject to statutory rules of invalidity and revocability.

As with ordinary contracts, marital property agreements are subject to the provisions of the the People's Republic of China Civil Code on the validity of civil legal acts and are limited by the risk of invalidity or revocability of the agreement. Therefore, when signing the marital property agreement, it is necessary to ensure that both parties have the corresponding capacity to act, and both parties draft and sign the agreement in a calm and rational manner, and there is no situation of signing the agreement due to coercion, fraud or taking advantage of others. Ensure that both parties have fully understood the meaning and legal consequences of the terms of the agreement, and the signed marital property agreement is the true intention of both parties. In the event of fraud, coercion, or taking advantage of human danger, there is a legal risk that one party may claim the rescission of the agreement from the people's court.

3 \ \ agreement on property involving the rights of others \ \ or circumstances in which the common property is agreed to be given to another

in daily life, the property situation between family members is often closely linked, but the marital property agreement is limited to the property between the husband and wife. Whether it is an agreement on the property under the name of one parent or an agreement to give the joint property of the husband and wife to a third person such as a child, it is usually not within the scope of the marital property agreement, but should sign a property holding agreement or a gift agreement with the third person separately to achieve the above-mentioned agreement purpose; in addition, the marital property agreement involves an agreement on the company shares held by one party, it does not have external effect against third parties such as other shareholders until the approval and registration of changes in equity transfers have been completed. In the case of a property dispute after the divorce between Shang and Li, Li and Shang signed a "Marital Property Agreement", agreeing that Li would voluntarily change a set of XX houses in Daxing District, Beijing before marriage into the joint property of husband and wife and belong to Shang and Li. The People's Court of Daxing District of Beijing wrote in the judgment of this case: "Now Courts 47 and 49 have been demolished, and the corresponding compensation benefits involve the rights of outsiders. In this case, this court cannot treat the above benefits as husband and wife. The common property is distributed between Shang and Li, so the court does not support Shang's litigation request."

4. the validity of the "loyalty agreement"

in practice, there is no shortage of agreements signed by one party to guarantee loyalty to the other party because of the fault of one party in marriage, and the consequence of violating the duty of loyalty of such agreements is often the unconditional ownership of the agreed property to the other party, commonly known as "clean out of the house", such provisions are often referred to as "loyalty agreements". The court's determination of the validity of the loyalty agreement is controversial, and the mainstream view is still that such clauses are consciously performed, do not have the effect of enforcement, and cannot be used as a basis for the division of property. In the case of divorce dispute between Wang and Shen, which was tried by Shunyi District People's Court of Beijing, the court held: "According to the content of the Real Estate Agreement signed by Wang and Shen on February 26, 2018, if any party violates the obligation of husband and wife loyalty, he shall bear the responsibility of giving up the distribution of property, which is the nature of the agreement on loyalty between husband and wife ...... Whether husband and wife are loyal belongs to the emotional and moral category in essence, the loyalty agreement concluded between husband and wife shall be consciously performed by the parties in accordance with the principle of good faith. The law does not prohibit the signing of such agreements between husband and wife, but it does not give such agreements the enforcement power, which can not be used as the basis for dividing the joint property of husband and wife or determining the ownership of child custody."

5. of marital property agreements "for the purpose of divorce"

in divorce proceedings, if it is determined that the marital property agreement reached between the two parties is based on divorce as a necessary effective condition, as long as the two parties do not divorce, the agreement is deemed not to be effective, that is, "divorce" as an effective element of the agreement and failed to reach, so that when the two parties divorce, they will face a new division of property. Article 14 of the Interpretation (III) of the Supreme People's Court on Several Issues Concerning the Application of the the People's Republic of China Marriage Law stipulates that if the parties reach a property division agreement conditional on registering a divorce or going to the people's court to agree on a divorce, if the two parties fail to agree on a divorce, if one party repents in the divorce proceedings, the people's court shall determine that the property division agreement has not taken effect and divide the joint property of the husband and wife according to the actual situation. The first paragraph of Article 69 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Code of the the People's Republic of China Civil Code stipulates that if the parties reach a property and debt settlement agreement conditional on divorce by agreement or mediation in the people's court, if the divorce fails and one party repents in the divorce proceedings, the people's court shall determine that the property and debt settlement agreement has not taken effect, and according to the actual situation in accordance with the provisions of articles 1087 and 1089 of the civil code. \ \ it is worth noting that it is not as long as the marital property agreement mentions the issue of how to divide the joint property of the husband and wife when the divorce is pending, and the two parties have not divorced, it will be deemed that the marital property agreement has not taken effect, but the content of the agreement. And the purpose of substantive judgment. \ \ in the case of a property dispute between Wei and Jin after divorce, which was upheld by the Beijing Fangshan District people's Court in the first instance and the Beijing second Intermediate people's Court in the second instance, the court held: "although the Marital Property Agreement signed on July 7, 2018 in this case mentions the ownership of real estate pending divorce, the agreement is not an agreement for the purpose of divorce and should be recognized as a marital property agreement, therefore, the agreement cannot be applied to the above-mentioned legal provisions and is found to be not in force, and the above-mentioned agreement is legally valid." Therefore, special attention should be paid when signing the marital property agreement: first, in terms of content, it is not necessary to avoid relevant expressions involving "divorce" as far as possible, or if it is hoped that the marital property agreement will also be used as the basis for property division in litigation, it can be clearly agreed that "even if the divorce fails, the contents of this agreement are still valid and both parties shall comply with it"; Second, in terms of time, if you want to distribute the marital property in accordance with the content of the marital property agreement, it is recommended to avoid divorce proceedings as much as possible in the short term after the signing of the marital property agreement, in order to avoid the risk of being deemed to be signed for the purpose of divorce.

The distinction between the act of 6. agreement and the act of gift

in some cases, there is a risk that a marital property agreement may be recognized as a gift agreement, leading to the risk that the giving party has the right to revoke the agreement in accordance with the law before delivery or change of registration. From the theoretical level, the marital property agreement and the gift agreement are both property agreements made during the marriage, but the gift of marital property is essentially different from the agreed behavior in many aspects: the gift of marital property is the purpose of one party to increase the value of the other party's wealth, and the marital property agreement is the agreement on the marital property system to be adopted in the property relationship between husband and wife. The function and purpose of marital property gift is to change the ownership of a particular property, and the function and purpose of marital property agreement is to arrange the property relationship between husband and wife in general. Marital property gifts are usually directed at specific or specifiable things, and marital property agreements are usually directed at part or all of the property. The contract reached by the husband and wife on the gift of marital property is a one-time contract, and the contract reached by the husband and wife on the marital property is a continuing contract. The application of its rules is general and repeatable. It has continuous binding force on the property continuously acquired during the existence of the marriage relationship between the two parties, and has the specificity of long-term and general adjustment. It is a general construction of the state of property law between husband and wife. The Haidian People's Court held in the case of a dispute over the gift contract between Zhang and Zhao: "The property rights of the house involved in the case are registered as jointly owned by Zhao and Zhang, and the two parties signed the" Real Estate Agreement "to agree that the house is jointly owned by the two. It is owned by Zhang alone. Although it adopts the form of agreement in a broad sense, it does not conform to the model of husband and wife property agreement stipulated by our law. At that time, the two parties did not divorce, which was essentially a gift of marital property.... In this case, the" real estate agreement "signed by both parties is not notarized, after the agreement is signed, Zhao, as the donor, can cancel the gift before the real estate change registration. Since there has been no change in the ownership of the real estate involved in the case, Zhao's request to revoke the" Real Estate Agreement "signed with Zhang on September 29, 2021 is legally based, and this court supports it."

7. legal advice on strengthening the validity of the agreement

in order to further protect the legal effect of the marital property agreement, both husband and wife can go to the notary office to notarize the agreement and sign the agreement under the witness of the notary. The marital property agreement shall be signed by both husband and wife in the witness of the notary. The agreement shall take effect from the date of signing and notarization by both parties. Before the signing of the agreement, the contents of the agreement shall not be legally binding on both parties.